New orders for the US-American capital goods unexpectedly fell in may, and shipments also declined, reflecting a loss of momentum in the manufacturing sector, halfway through the second quarter.
The Commerce Department said on Monday that non-defense capital goods orders excluding aircraft, just a proxy for business investment plans, observed decreased by 0.2 percent, the biggest decline since December.
This so-called core capital goods orders were revised to an increase of 0.2 percent in April. They were previously increased, reported by 0.1 percent.
Shipments of core capital goods fell 0.2 percent last month after an increase of 0.1 percent in April. Core capital goods shipments to the calculation of the investment in equipment in the government, the gross domestic product measurement.
Economists by Reuters surveyed had forecast core capital goods orders increasing 0.3 percent in may.
“We see the core data as consistent with the soft investment of the company in the second quarter,” said Blerina Uruci, economist at Barclays.
US Treasury yields fell and the dollar was trading lower against a basket of currencies after the publication of the data. US stocks rose in the report to open, the recovered higher as technology shares and oil prices climbed from last week’s seven-month lows.
The report added, there is a growing concern that an acceleration of the expected economic growth in the second quarter may not be as robust as it is. The most recent data on retail sales, industrial production and inflation break and the housing have been mixed given data.
The weakness comes despite a continued strong labour market. The unemployment rate fell to a 16-year low of 4.3 percent in may.
Overall, orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, fell 1.1 percent in may, the biggest decline since November. They fell by 0.9 percent in April.
Last month, orders for machinery rose by 0.6 percent, while deliveries of 0.3 percent. Civilian aircraft orders fell to 11.7 percent, and bookings for defense aircraft and parts plummeted 30.8 percent. Orders for vehicles and vehicle parts increased by 1.2 percent.